Sending Money Abroad from Canada — Best Remittance
By WelcomeAide Team
Why Remittances Matter
Sending money to family back home is one of the first financial tasks many newcomers face in Canada. Whether you are supporting parents, paying for a sibling's education, or maintaining a home overseas, remittances are a regular expense that can add up significantly over time. Canada is one of the world's largest sources of remittances — billions of dollars flow from Canada to countries around the world every year.
The challenge for newcomers is finding the right balance between cost, speed, convenience, and reliability. Transfer fees and exchange rate margins can eat into your money — sending $500 through the wrong service could cost you $30-50 more than necessary. Over a year of monthly transfers, that adds up to $360-600 in unnecessary fees. This guide helps you choose the most cost-effective option for your specific situation.
Understanding Transfer Costs
When you send money internationally, you pay two types of costs:
1. Transfer Fee
This is the explicit fee charged per transaction. It ranges from $0 to $15+ depending on the service, transfer method, and amount sent. Some services advertise "zero fees" but compensate with worse exchange rates.
2. Exchange Rate Margin (Markup)
This is the hidden cost that most people miss. Every service offers you an exchange rate that is worse than the mid-market rate (the real exchange rate you see on Google or XE.com). The difference between their rate and the real rate is their profit margin. This margin can range from 0.3% (Wise) to 3-5% (banks and some traditional services).
Example: You want to send $1,000 CAD to India. The mid-market rate is 1 CAD = 62 INR.
- Service A (bank): Rate of 59.5 INR/CAD + $25 fee = Your family receives 59,500 INR. Total cost: $66 (25 + 41 in rate margin)
- Service B (Wise): Rate of 61.7 INR/CAD + $7 fee = Your family receives 61,007 INR. Total cost: $12 (7 + 5 in rate margin)
Service B delivers over $50 more to your family on the same $1,000 transfer. This is why comparing the total received amount (not just the fee) is the most important factor.
Best Remittance Services for Newcomers
1. Wise (formerly TransferWise)
Wise is consistently rated as one of the cheapest international transfer services. It uses the real mid-market exchange rate with a small transparent fee.
- Fees: Typically $3-10 per transfer depending on amount and destination
- Exchange rate: Mid-market rate (the real rate) — no markup
- Speed: 1-3 business days for most transfers. Some corridors offer instant delivery.
- Transfer methods: Bank transfer, debit card. Credit card transfers have higher fees.
- Delivery options: Bank deposit, mobile wallet in some countries
- Best for: Regular transfers to most countries, especially for those who prioritize low cost
- Multi-currency account: Wise also offers a multi-currency account where you can hold money in 40+ currencies
2. Remitly
Remitly is popular for remittances to developing countries, offering both economy and express delivery options.
- Fees: Free for first transfer (promotional). Economy: usually $0-4. Express: $0-10.
- Exchange rate: Slightly below mid-market (1-2% markup). Express option has a worse rate than economy.
- Speed: Express: minutes to hours. Economy: 3-5 business days.
- Delivery options: Bank deposit, mobile money (M-Pesa, GCash, etc.), cash pickup, home delivery in some countries
- Best for: Transfers to India, Philippines, Mexico, Guatemala, and other popular remittance destinations. Excellent mobile app.
3. Western Union
Western Union is the most widely available service globally with the largest agent network for cash pickup.
- Fees: $5-30+ depending on amount, speed, and delivery method
- Exchange rate: Typically 2-4% below mid-market
- Speed: Minutes for cash pickup. 1-5 days for bank deposit.
- Delivery options: Cash pickup at thousands of agent locations worldwide, bank deposit, mobile wallet
- Best for: Recipients in rural areas without bank accounts who need cash pickup. Available in 200+ countries.
- Caution: One of the more expensive options. Use it when cash pickup is the only delivery method available.
4. Canadian Bank Wire Transfers
All major Canadian banks offer international wire transfers, but they are typically the most expensive option.
- Fees: $15-50 per transfer (outgoing). Receiving bank may charge additional fees ($10-25).
- Exchange rate: 2-4% below mid-market — banks offer some of the worst exchange rates
- Speed: 2-5 business days
- Best for: Large transfers (over $10,000) where security and direct bank-to-bank is preferred. Not cost-effective for regular smaller remittances.
5. WorldRemit
- Fees: $0-5 per transfer
- Exchange rate: 1-2% below mid-market
- Speed: Minutes for mobile money, 1-3 days for bank deposit
- Delivery options: Bank deposit, mobile money, cash pickup, airtime top-up
- Best for: Transfers to Africa and South/Southeast Asia via mobile money
6. Payoneer
- Best for: Freelancers and business payments rather than personal remittances
- Useful if: You receive payments from international clients and want to transfer to your home country bank
7. XE Money Transfer
- Fees: No transfer fees for most amounts over $500
- Exchange rate: Competitive, close to mid-market
- Speed: 1-4 business days
- Best for: Larger one-time transfers with good rates and no fees
How to Compare Services
When choosing a remittance service, do not just compare fees. Use these steps:
- Step 1: Check the mid-market exchange rate on Google or XE.com for your currency pair (e.g., CAD to INR)
- Step 2: Enter your transfer amount on 3-4 different services and note the total amount the recipient will receive
- Step 3: The service that delivers the most money to your recipient is the cheapest — regardless of what they charge as a "fee"
- Step 4: Consider speed and delivery method. If your family needs cash tomorrow, the cheapest service with a 5-day delivery is useless.
Useful comparison tools:
- Monito.com: Real-time comparison of transfer services for any corridor
- RemitFinder.com: Canadian-specific remittance comparison
- SaveOnSend.com: Detailed analysis and comparison of transfer costs
Tips to Save Money on Remittances
- Send larger amounts less frequently: A monthly $600 transfer is usually cheaper than four weekly $150 transfers, because you pay the fee once instead of four times.
- Avoid credit card funding: Most services charge extra (3-5%) for credit card-funded transfers. Use bank transfer or debit card instead.
- Lock in good exchange rates: Some services (Wise, OFX) let you set rate alerts. When the rate moves in your favor, transfer a larger amount.
- Use promotional offers: Many services offer free first transfers or reduced fees for new customers. Take advantage of these.
- Consider a multi-currency account: If you regularly send to the same country, a Wise multi-currency account lets you hold the destination currency and send when rates are favorable.
- Avoid airport and convenience store kiosks: These typically have the worst exchange rates and highest fees.
Tax Implications of Remittances
Good news: sending money to family abroad is NOT taxable in Canada. You do not need to report remittances on your tax return. However, there are a few things to know:
- Large transfers: If you transfer over $10,000 CAD in a single transaction, the financial institution may report it to FINTRAC (Financial Transactions and Reports Analysis Centre of Canada) as part of anti-money-laundering regulations. This does not mean you are doing anything wrong — it is simply a reporting requirement.
- Foreign assets: If you hold property or investments abroad worth more than $100,000 CAD, you must report this on form T1135 when filing your Canadian taxes.
- Income from abroad: If you earn income from foreign sources, that IS taxable in Canada and must be reported. Remittances (sending money OUT) are different from foreign income (receiving money).
Protecting Yourself from Scams
- Only use reputable, licensed money transfer services
- Never send money to people you do not know (common scam: "Send me money and I will invest it / give you a visa")
- Be cautious of services offering exchange rates significantly better than mid-market — if it sounds too good to be true, it probably is
- Verify that online services are registered with FINTRAC (Canadian law requires all money service businesses to be registered)
- Keep records of all transfers (amount, date, exchange rate, fees, recipient) for your personal records
Setting Up Regular Remittances
If you send money home regularly (monthly), set up a system:
- Choose your preferred service based on cost comparison
- Set up automatic recurring transfers if the service offers it (Wise and Remitly both do)
- Budget the remittance as a fixed monthly expense
- Review your service choice every 6 months — the market changes, and a competitor may now offer better rates
Sending money home is an act of love and responsibility. Making sure as much of that money as possible reaches your family — rather than being lost to fees and poor exchange rates — is one of the smartest financial decisions you can make as a newcomer. Take 15 minutes to compare services, and you could save hundreds of dollars a year.
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